Reconfiguring Environmental Regulation: The Future Policy Agenda

1
Reconfiguring Environmental Regulation The
Future Policy Agenda

• Neil Gunningham
• Regulatory Institutions Network
• Australian National University

2
Reconfiguring Regulation

• Overview of the regulatory landscape
• Frameworks for understanding regulatory
  reconfiguration
• Role of Smart Regulation and regulatory
  pluralism
• Policy Implications

3
The shifting regulatory landscape

• First generation problems reduced but second
  generation far more challenging
• The contracting state
• Increasing power and sophistication of NGOs
• Increasing interest of commercial third parties
  in environmental issues
• The changing roles of business

4
Diverse second generation instruments emerge

• Reinventing Environmental Regulation (USA)
• Negotiated Agreements (Western Europe)
• Informational Regulation (eg Indonesia)
• Industry self-regulation and self-management

5
Reconfiguring regulation four frameworks

• Reflexive and meta-regulation
• Civil regulation and participatory governance
• Regulatory pluralism
• Explaining corporate environmental behavior the
  license perspective

6
The role of Meta Regulation

• Recognises the limitations of the state to deal
  with complex environmental issues
• Focus on procedures rather than prescribing
  behaviour
• State shifts to meta-regulation and meta-risk
  management
• - Government monitoring of self-monitoring,
  or the regulation of self-regulation
• - To monitor and seek to re-make the risk
  management systems of regulatees
• Enforcement means refusing accreditation

7
Continual Improvement
Commitment Policy
Review and Improvement
Planning
Implementation
Measurement Evaluation
Environmental Management System Model
8
Civil regulation and participatory governance

• organisations of civil society set standards for
  business behaviour
• Mechanisms include direct action, consumer
  boycotts, certification programs, partnerships
• State role to empower civil society

9
Regulatory Pluralism and Smart Regulation The
issue

• Market failure/government failure
• A diversity of next generation instruments, but
  how do we select between them?
• One size does not fit all eg size and sector
  matter

10
Smart Regulation

• Solutions require
• broader range of strategies,
• tailored to broader range of motivations,
• harnessing broader range of social actors
• Recognises roles of ISO, supply-chain pressure,
  commercial institutions,financial markets, peer
  and NGO pressure
• steering not rowing harnessing capacities of
  markets,civil society and other institutions

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1. Design comprehensive policy mixes

• - build on strengths and compensate for
  weaknesses of individual instruments
• - build on advantages of engaging broader
  range of parties
• But note
• - practical limits/regulatory overload
• - limited public resources
• - not all combinations are complementary

12
Optimal Mixes Involve

• matching tools with particular problem
• with the parties best capable of implementing
  them
• with each other

13
Examples

• Environmental Improvement Plans
• Beyond Compliance Two Track Regulation
• Institute of Nuclear Power Operations
• Car Body Shops
• Regulating Horticulture

14
Number of Organisations
Fast Follower
Team Player
Compliance Seeker
Polluter
Key Player
Leader
15
Higher Courts
Incapacitation
Fines and other punitive action
Breach of Trust
Two Track Partnership
16
H
Coercion
Third Parties
Government
L
Business
17
The license model

• Views businesses as constrained by a
  multi-faceted licence to operate
• Corporate behaviour explained by interactions
  between regulatory, social and economic licences
• - Efficiency and effectiveness of technology
  based command and control
• The importance of Social Licence underpinned by
  Informational regulation, and empowering NGOs
  and communities
• Management style as the perceptual filter through
  which management interprets its license conditions

18
Different frameworks invoke different policy
prescriptions

• Strengthen internal reflection and self-control
  (reflexive regulation)
• Introduce a plethora of instruments that and
  allow the state to steer not row (regulatory
  pluralism)
• Empower the institutions of civil society to make
  corporations more accountable (civil regulation)
• Exploit points of leverage provided by different
  strands of firms licence to operate (licence
  model)

19
Different frameworks are appropriate to different
contexts

• Large reputation sensitive companies vs SMEs
• Integrated catchment management
• Major Hazard Facilities
• Diffuse source pollution
• Pulp mills

20
The future?

• The contracting state contracts vs criminal law
  (Sust Covenants)
• Corporate shaming (informational regulation)
• Economic instruments and market signals (Load
  Based Licenses)
• Processes and systems locking in continuous
  improvement (Meta Regulation, EIPs , Regulatory
  Flexibility)
• Harnessing second and third parties as surrogate
  enforcers
• The role of Government- steering not rowing?
• Traditional enforcement